Archives for February 18, 2018

Key Highlights

Ripple price after an upside move faced a strong resistance at $1.1500 against the US dollar.

There was a break below a connecting bullish trend line with support at $1.0800 on the hourly chart of the XRP/USD pair (data source from SimpleFx).

The pair is currently holding the $1.00 support, but it is struggling to move higher.

Ripple price made a downside move recently against the US Dollar and Bitcoin. XRP/USD must stay above the $1.0000 support area to avoid further declines.

Ripple Price Resistance

There was a substantial recovery above $1.10 this past week in Ripple price against the US Dollar. The price traded above the $1.12 and $1.14 level, but it could not break the $1.15 resistance. It formed a high at $1.1508 and later started a downside move. It declined and broke the $1.10 support area to settle below the 100 hourly simple moving average.

During the downside, there was a break below a connecting bullish trend line with support at $1.0800 on the hourly chart of the XRP/USD pair. However, the downside move was protected by the $1.0000 support. A low was formed at $1.0055 before the price started an upside correction. It traded above the 23.6% Fib retracement level of the last decline from the 1.1508 high to $1.0055 low. However, the upside move was protected by the $1.06 level and the 100 hourly SMA. On the upside, there is a bearish trend line with resistance at $1.0700 on the same chart.

Therefore, an upside move above $1.06 and $1.07 won’t be easy. On the downside, the pair must hold the $1.00 support level to avoid further declines. Below $1.00, the price may decline towards $0.8500 in the near term.

Looking at the technical indicators:

Hourly MACD – The MACD for XRP/USD is currently in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is currently well below the 50 level.

Security experts advise on how to keep yourself and your digital coin safe from thieves that focus on the crypto-wealthy.

Criminals targeting cryptocurrency investors

Cases of thieves targeting those who have gotten wealthy from the boom in Bitcoin, Ethereum and other digital currencies are on the rise worldwide. From Phuket, Thailand, to Manhattan to the Ukraine, stories of kidnappings and even killings for access to peoples Bitcoin is becoming a staple in the world news.

Fiat currency accounts in traditional banks and other holding systems have elaborate checks and countermeasures developed over a long time against thieves. The anonymous nature of cryptocurrency though assures criminals that once they have access to and can transfer the information to their own wallets it is nearly impossible to track down their identities.

Chainalysis is a company that specializes in tracing criminal activity on the Blockchain. Jonathan Levin the founder of the company has assisted law enforcement all over the world to try and track down stolen Bitcoin and its like.

Even when a transaction can be tracked through the Blockchain ledger though the anonymous design of cryptocurrency allows criminals not to have their true identities linked to their accounts. This is where the trail goes cold and not much more can be done.

“For this [crime], the advantage of Bitcoin is that it’s hard to verify,” said Chanut Hongsitthichaikul an investigator with the Chalong Police Station in reference to the extortion case in Thailand that involved a young Russian couple who were held in their apartment by armed assailants until $100,000 worth of cryptocurrency was transferred.

The police were able to track the victim’s laptop to Kuala Lumpur where it was discarded and that was where the investigation ended.

“This is now becoming more pervasive and touching more law enforcement divisions that deal with organized crime and violent crime on a local level,”

Jonathan Levin, founder of Chainalysis.

New security being developed

Recently a group of about 170 leaders in the crypto world held a panel discussion about security in Cancun Mexico. Calling the meeting the Satoshi roundtable the group discussed how individuals could protect themselves and their holdings from crypto thieves.

One measure that came from the meetings was having a ‘duress wallet’. That is a wallet with a small amount of currency to throw thieves off the trail of larger holdings.

Overall security advisers agree one the best measures presently is to keep your holdings in a multi-signature wallet. That is a wallet that requires at least two people to sign in for a transaction to be completed and for one of those people to be off location, perhaps an attorney.

Programmers are also in the process of creating wallets with built-in stress codes. Like duress alarms in banks, these codes can be triggered to inform either private security or law enforcement directly while a person is forced to make a transaction.

Perhaps the best and easiest way to protect yourself and your crypto-currency is to keep a low profile. In at least one high profile case the robbery was perpetrated after the victim had told his friend about his newly acquired crypto-fortune.

A Sunday pull-back is becoming almost regularity in the crypto markets and a red Monday morning is the result. Bitcoin made it to a weekly high of $11,300 before cooling off a little and retreating back to $10,600 where it currently trades. The correction has taken all of the altcoins with it and most are in the red during the Asian trading session this morning.

To find one that is performing well we need to leave the top 25 once more and go further down the chart. Nothing really stands out in the top 50 which takes us all the way down to 71 and a token called Polymath which is trading 16.3% higher. This newcomer to the altcoin world is trading at $1.35 up from $1.11 yesterday while all others are in decline.

Polymath is a securities based token which aims to allow them to be migrated to the blockchain. According to the white paper, which has only been published this month, Polymath provides a decentralized protocol for trading security tokens enabling s individuals and institutions to authenticate their identity, residency, and accreditation status to participate in a wide range of security token offerings. Using the network organizations and companies can launch ST20 tokens that are already automatically legally compliant and regulated security tokens. Tickets for their up and coming Polycon security token conference in the Bahamas have already sold out.

Interest in POLY, which has only really been traded on the Kucoin exchange since early February, spiked on the 12th. Current market capacity sits at $318 million and there are 1 billion POLY tokens available with 239 million currently circulating.

The only cryptocurrency in the top 25 showing a slight gain this morning is Ethereum Classic, up 0.75% to $34.39.

Bitcoin price is still trending higher after breaking above a few key resistance levels.

Bulls are gaining traction and allowing price to move above an ascending trend line on the 1-hour time frame.

Price appears to have completed its pullback from the recent rally and could head up to the extension levels next.

Bitcoin price looks ready to resume its rally after a brief pullback to a short-term rising trend line.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This confirms that the uptrend is more likely to continue than to reverse. Also, the 100 SMA lines up with the ascending trend line to add to its strength as support.

Stochastic is also pulling up from oversold levels to signal a return in bullish pressure. RSI is on the move down, though, so bears might still have enough energy for another test of support or perhaps a breakdown.

If a bounce happens, bitcoin price could aim for the 38.2% Fibonacci extension level at $11,141 or the 50% extension closer to $11,500. The 61.8% extension is at $11,830 then the 76.4% extension is at $12,257. The full extension is near the $13,000 mark.

Market Factors

The dollar regained some ground to its peers on Friday when traders likely booked profits ahead of the President’s Holiday today. There are no major reports due from the US economy but the lower liquidity could give rise to more market volatility.

Sentiment improved for bitcoin over the past week as an official from the South Korean government remarked in the earlier weekend that they are open to pursuing something like BitLicense. This would pave the way for regulation without hampering development in the cryptocurrency industry.

Looking ahead, sustained risk appetite and dollar weakness might continue to prop bitcoin price up, provided that there are no major changes to sentiment. The FOMC minutes are due, though, and more hawkish hints could still renew dollar demand and weigh on bitcoin.

Key Points

Bitcoin cash price after a nice upside move found sellers near the $1,600 level against the US Dollar.

There was a break below a short-term bullish trend line with support at $1,520 on the hourly chart of BCH/USD (data feed from SimpleFX).

The pair is currently holding the $1,400 support, but it may remain under pressure for some time.

Bitcoin cash price lost momentum above $1,600 against the US Dollar. BCH/USD is currently correcting lower and is showing a few bearish signs.

Bitcoin Cash Price Resistance

There were decent gains this past week above $1,500 in bitcoin cash price against the US Dollar. The price traded above the $1,550 and $1,600 levels. However, the price was not able to maintain momentum above $1,600 and started a downside move. A high was formed at $1,617 and later the price corrected below $1,550. It also moved below the $1,400 support and the 100 hourly simple moving average.

Moreover, there was a break below a short-term bullish trend line with support at $1,520 on the hourly chart of BCH/USD. Later, the pair recovered and moved above the $1,400 level and the 100 hourly SMA. It corrected above the 23.6% Fib retracement level of the last decline from the $1,617 high to $1,381 low. However, the upside move failed near the $1,500 level. BCH price could not move above the $1,500 level and is currently trading in a bearish zone.

The 50% Fib retracement level of the last decline from the $1,617 high to $1,381 low was tested recently. It means the price completed an upside correction and it may decline once again towards or below $1,400. Below $1,400, the price mat decline towards $1,320.

Looking at the technical indicators:

Hourly MACD – The MACD for BCH/USD is currently in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BCH/USD has moved below the 50 level and is showing bearish signs.

Venezuela’s “Petro” cryptocurrency will attract investments from Turkey, Qatar, the U.S., and Europe, the country’s cryptocurrency regulator, Carlos Vargas, told reporters on Friday. The Petro will be offered for sale this Tuesday, February 20th, and comes as Venezuela is suffering from quadruple-digit inflation and chronic shortages of food and medicine.

Venezuelan President Nicolas Maduro announced the launch of the Petro in December. Maduro has repeatedly said that his country is the victim of an “economic war” — prompted by financial sanctions imposed by the United States — and that the sale of the new digital currency will help the South American country circumvent this problem.

“On Tuesday, there will be quite a few announcements about the start of the process,” Vargas said on the sidelines of a political meeting in Caracas. “And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.”

Skeptics say that concerns about Venezuela’s financial solvency will likely limit investor interes, and the U.S. Treasury Department has warned the Petro may violate sanctions against the OPEC (Organization of Petroleum Exporting Countries) nation. These sanctions — levied last year by Washington — block U.S. banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the country from borrowing abroad to bring in new hard currency or refinance existing debt.

Venezuela’s Superintendence of Cryptocurrencies and Related Activities as well as the Blockchain Observatory, will regulate how the Petro, which is “backed” by 5 billion barrels of oil reserves, functions. “This is going to allow us to move forward to new ways of international financing for the country’s economic and social development,” Maduro said.

Since its inception, the Petro has been controversial. Even Venezuelan lawmaker Jorge Millan had strong words against about the coin: “This is not a cryptocurrency, this is a forward sale of Venezuelan oil,” adding, “It is tailor-made for corruption.”

But that didn’t stop the President from moving forward. In January, Maduro announced that over 800,000 Venezuelans had already been recruited to mine the cryptocurrency. “We are going to call them a special cryptocurrency team… They will set up cryptocurrency mining farms in all states and municipalities of the country,” he said.

The president even approached OPEC with his idea: “I have explained to Mohammed Barkindo [OPEC Secretary General] the goodness of the Petro. The cryptocurrency is the world of the future. I am very excited as well as the people of Venezuela,” said Maduro. It’s not surprising he would look for the organization’s support: OPEC is comprised of some of the world’s top oil producers and has enormous sway on the global oil market.

Africa is rarely considered to be one of the larger markets for cryptocurrencies, but with the right factors in place — such as an increasingly tech-savvy populous and inflation triggered by central banks — that might be set to change.

Case in point: The surge in popularity of cryptocurrencies has contributed to the opening of at least 15 new trading venues in South Africa within the past year alone. And peer-to-peer marketplaces also recorded a surge in trading volumes as Bitcoin’s price reached historic highs at the end of last year.

Global wallet and exchange Luno reported 2000 BTC worth of transactions in November 2017, when the coin’s price was hovering in the $10,000 range, and approximately 37% of those transactions occurred in South Africa. Luno began operations in 2013 and boasts 1.5 million users spread across 40 countries — including Indonesia, Malaysia, Nigeria, South Africa, and the U.K. The company has big plans: By 2025, it plans to reach 1 billion customers. To put that in context, North America’s largest cryptocurrency exchange, Coinbase, had 11.7 million users last year.

The South African government is also making moves. The country’s central bank has launched a program that will trial JPMorgan’s Quorum blockchain in interbank clearing and settlement. According to an official statement dated February 13th, the South African Reserve Bank (SARB) revealed it has established a fintech program that will prioritize, among other things, a project dubbed Khokha to explore a proof-of-concept (PoC) using the tech.

Why is Africa becoming such a big market?

First, conditions in the continent are conducive to the adoption of cryptocurrencies — with many countries in the continent such as Zimbabwe, South Sudan, and Nigeria, suffering from rampant inflation. What makes cryptocurrencies so appealing is their decentralized method of operation, permitting them to become alternatives to fiat currencies that have been de-railed thanks to disastrous central banking policies.

Second, the increasing use of mobiles and other computing technology within the continent has helped its population become comfortable with cryptocurrency technology. New businesses that use blockchain are emerging all the time: Kenya-based BitPesa, for example, is a payment platform and money transfer service that works with 60 banks around Africa and has seven mobile wallets on its platform.

Third, the threat of government regulation, which has roiled cryptocurrency markets recently, is (presently) fairly low in Africa. While governments and agencies have warned about the dangers of investing in cryptocurrencies, regulators in African countries have taken a hands-off approach to trading at exchanges.

But Africa is susceptible to the same pressures as cryptocurrency markets in other parts of the globe: Cryptocurrency traders in Africa were paying a premium of as much as 40% in 2017. According to reports, the premium occurred due to a shortage of liquidity, meaning sellers were able to command unrealistically high prices due to high demand from buyers.

Outside the continent, other countries are also looking to cryptocurrencies to help solve their financial woes. Earlier this year Venezuela, which has been crushed by quadruple-digit inflation, announced plans to develop its own token, the Petro, in attempts to turn things around.

Poland’s central bank — Narodowy Bank Polski (NFB)— has admitted to paying for social media campaigns that attacked the legitimacy of cryptocurrencies. The bank spent 91,000 zloty ($27,100) on the campaigns, with the money going to Google, Facebook, and a Polish Youtube partner network called Gamellon, Money.pl reports. The news comes after the site published a letter from NFB in which it admits it paid for the anti-crypto campaign.

While it’s not unusual for governments or agencies to issue warnings or try to educate the public on what regulators may consider risky investments, Polish financial authorities have taken it a step further, spending taxpayers’ money on a smear campaign— trying to sway public opinion against crypto assets by paying social media influencers to attack them. The bank worked in cooperation with the country’s Financial Supervision Authority, Komisja Nadzoru Finansowego (KNF).

The money went to a Polish Youtube network that represents many popular, young content creators. A video with the title “I LOST ALL MONEY?!” — which depicted investments in cryptocurrencies in a negative light — appeared on December 8th on Marcin Dubiel’s channel, a Polish Youtube prankster who has over 900,000 subscribers.

Dubiel’s video, which has over 500,000 views, contains the hashtag #uważajnakryptowaluty. The tag is associated with the “Watch out for cryptocurrencies” website, which was set up by the central bank. The Planeta Faktów (Planet of Facts) Youtube channel was also paid to produce a video titled “10 differences between money and cryptocurrency that you need to know.”

Of note is that the video was not marked on Youtube as “including paid promotion,” and there is also no mention in its description that it is part of the campaign for which the NBP paid. Polish technology website Spider’s Web notes that this is against the law in Poland, where sponsored content has to be marked as such. Furthermore, judging by the quality of the content, its distribution channels, and its creators, the smear campaign appears to target a younger generation.

This type of attack, one that utilizes social media, is a fast-growing method for influencing public opinion. Over the past few days, the U.S. Justice Department has charged 13 Russians and three companies in an indictment that unveiled a sophisticated network designed to subvert the 2016 election and to support the Trump campaign. It stretched from offices in St. Petersburg, to the social media feeds of Americans, and, ultimately, into the streets of election-influencing battleground states. The Polish Central Bank seems to be taking a similar approach, but this time to influence the public’s opinion on cryptocurrencies.

After questions were raised, NBP, in a letter dated February 9th, admitted that it “carried out a campaign on the issue of virtual currencies in social media.” As mentioned above, the campaign cost about $27,000 in taxpayers’ money.

Poland’s central bank is one of many across the globe that has issued warnings against cryptocurrencies and associated technology. The Monetary Authority of Singapore has urged citizens to “act with extreme caution,” while South Korea’s Financial Supervisory Service (FSS) has also warned people about investing in the virtual coins.